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AT&T Brief of Intervenors Supp. Respondents, In Re: FCC 11-161

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Released: April 25, 2013
Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 1

NO. 11-9900

UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT



IN RE: FCC 11-161

__________

ON PETITIONS FOR REVIEW OF AN ORDER OF
THE FEDERAL COMMUNICATIONS COMMISSION
__________

UNCITED BRIEF OF INTERVENORS IN SUPPORT OF FEDERAL

RESPONDENTS IN RESPONSE TO THE AT&T PRINCIPAL BRIEF

__________







Samuel L. Feder
Luke C. Platzer
JENNER & BLOCK LLP
1099 New York Ave., NW
Suite 900
Washington, DC 20001
Phone: (202) 639-6092
Facsimile: (202) 661-4999

Counsel for Comcast Corporation


Additional Counsel for Intervenors Listed on Following Page

April 24, 2013


Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 2

David E. Mills
E. Ashton Johnston
J.G. Harrington
Helen E. Disenhaus
DOW LOHNES PLLC
LAMPERT, O’CONNOR & JOHNSTON, P.C.
1200 New Hampshire Ave., NW
1776 K Street NW
Suite 800
Suite 700
Washington, DC 20036-6802
Washington, DC 20006
Phone: (202) 776-2000
Phone: (202) 887-6230
Facsimile: (202) 776-2222
Facsimile: (202) 887-6231


Counsel for Cox Communications, Inc.
Counsel for HyperCube Telecom, LLC

Christopher J. Wright

John T. Nakahata

WILTSHIRE & GRANNIS LLP
1200 Eighteenth Street, NW
12th Floor
Washington, DC 20036
Phone: (202) 730-1300

Counsel for Level 3 Communications,
LLC



Rick Chessen
Howard J. Symons
Neal M. Goldberg
Robert G. Kidwell
Steven Morris
Ernest C. Cooper
Jennifer McKee
MINTZ LEVIN COHN FERRIS
THE NATIONAL CABLE &
GLOVSKY AND POPEO, P.C.
TELECOMMUNICATIONS ASSOCIATION
701 Pennsylvania Avenue, NW
25 Massachusetts Avenue, NW
Suite 900
Suite 100
Washington, DC 20004
Washington, DC 20001
Phone: (202) 434-7300
Phone: (202) 222-2445
Facsimile: (202) 434-7400
rchessen@ncta.com
hjsymons@mintz.com
ngoldberg@ncta.com
rgkidwell@mintz.com
smorris@ncta.com
ecooper@mintz.com
jmckee@ncta.com


Counsel for NCTA



Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 3

CORPORATE DISCLOSURE STATEMENT

Pursuant to Fed. R. App. P. 26.1, Intervenors submit the following
Corporate Disclosure Statement through their counsel:
Comcast Corporation (“Comcast”) is a publicly held corporation. Comcast
has no parent corporation, and no publicly held corporation holds 10% or more of
the stock of Comcast.
Cox Communications, Inc. (“Cox”) is a privately-held corporation, formed
under the laws of the State of Delaware. Cox Enterprises, Inc., a privately-held
corporation, owns Cox through a direct majority interest and through a minority
interest held by an intermediate holding company, Cox DNS, Inc. Cox has no other
parent companies within the meaning of Rule 26.1, and no publicly-held company
has a 10% or greater ownership interest in Cox.
HyperCube Telecom, LLC (“HyperCube”) is a privately held company that
is wholly owned by its parent HyperCube, LLC. HyperCube, LLC is an indirect
wholly owned subsidiary of West Corporation (“West”). West is a publicly traded
company. According to filings made with the Securities and Exchange
Commission as of April 23, 2013, the following persons and entities hold a direct
interest of 10% or more in West: Thomas H. Lee Equity Fund VI, L.P., 18.0%; and
Thomas H. Lee Parallel Fund VI, L.P., 12.2%. The general partner of Thomas H.
Lee Equity Fund VI, L.P. and Thomas H. Lee Parallel Fund VI, L.P. is THL
i


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Equity Advisors VI, LLC. Thomas H. Lee Partners, L.P. is the sole member of
THL Equity Advisors VI, LLC. No other person or entity holds a direct 10% or
greater interest in West.
Level 3 Communications, LLC (“Level 3”) is a wholly-owned subsidiary of
Level 3 Financing, Inc. Level 3 Financing, Inc. is a wholly-owned subsidiary of
Level 3 Communications, Inc. Level 3 Communications, Inc. has no parent
corporation and no publicly held corporation owns 10% or more of its stock.

NCTA is the principal trade association of the cable industry in the United
States. Its members include owners and operators of cable television systems
serving over ninety (90) percent of the nation’s cable television customers as well
as more than 200 cable program networks. NCTA’s cable operator members also
provide high-speed Internet service to more than 50 million households, as well as
telephone service to more than 26 million customers. NCTA also represents
equipment suppliers and others interested in or affiliated with the cable television
industry. NCTA has no parent companies, subsidiaries or affiliates whose listing is
required by Rule 26.1.


ii


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TABLE OF CONTENTS

CORPORATE DISCLOSURE STATEMENT .......................................................... i
TABLE OF AUTHORITIES .................................................................................... iv
GLOSSARY .............................................................................................................. vi
SUMMARY OF THE ARGUMENT ........................................................................ 1
COUNTERSTATEMENT ......................................................................................... 2
A. Business Structure Of VoIP Providers. ........................................................... 2
B. Access Charge Tariffing By VoIP Providers And AT&T’s Challenge. ......... 3
C. The FCC’s Order. ............................................................................................ 5
ARGUMENT ............................................................................................................. 7
I. THE FCC’S TRANSITIONAL RULE IS SUBJECT TO HEIGHTENED
DEFERENCE. ...................................................................................................... 7
II. THE FCC ARTICULATED MULTIPLE, INDEPENDENTLY
REASONABLE GROUNDS FOR ITS INTERIM RULE. ................................. 8
A. Allowing The Market Gradually To Adjust. ................................................... 8
B. Parity Among Wireline Providers. ................................................................ 10
C. Incentives To Invest In IP Technology. ........................................................ 12
D. The Order Does Not Disregard AT&T’s Claims Of Competitive
Harm. ............................................................................................................. 12
CONCLUSION ........................................................................................................ 14



iii


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TABLE OF AUTHORITIES

CASES

ACS of Anchorage, Inc. v. FCC, 290 F.3d 403 (D.C. Cir. 2002) .............................. 8
Aviva Life & Annuity Co. v. FDIC, 654 F.3d 1129 (10th Cir. 2011) ........................ 7
Competitive Telecommunications Ass’n v. FCC, 117 F.3d 1068 (8th Cir.
1997) ..................................................................................................................... 8
Competitive Telecommunications Ass’n v. FCC, 309 F.3d 8 (D.C. Cir. 2002) ......... 7
MCI Telecommunications Corp. v. FCC, 750 F.2d 135 (D.C. Cir. 1984) .......... 8, 10
MCI WorldCom, Inc. v. FCC, 209 F.3d 760 (D.C. Cir. 2000) ................................ 13
Qwest Corp. v. FCC, 689 F.3d 1214 (10th Cir. 2012) ........................................ 1, 10
Rural Cellular Ass’n v. FCC, 588 F.3d 1095 (D.C. Cir. 2009) ................................. 7
Sorenson Communications, Inc. v. FCC, 659 F.3d 1035 (10th Cir. 2011) ............... 8
WildEarth Guardians v. National Park Service, 703 F.3d 1178 (10th Cir.
2013) ................................................................................................................. 7, 8

STATUTES

5 U.S.C. § 706 ............................................................................................................ 7
47 U.S.C. § 153(24) ................................................................................................... 3
47 U.S.C. § 153(53) ................................................................................................... 3
47 U.S.C. § 153(54) ................................................................................................... 3

ADMINISTRATIVE RULINGS

In re Access Charge Reform, Reform Of Access Charges Imposed By
Competitive Local Exchange Carriers, Eighth Report and Order and Fifth
Order on Reconsideration, 19 FCC Rcd 9108 (2004) ...................................... 4, 5
In re Charter Communications, Order, 27 FCC Rcd 7300 (2012) ............................ 2
iv


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In re Connect America Fund, Notice of Proposed Rulemaking and Further
Notice of Proposed Rulemaking, 26 FCC Rcd 4554 (2011) ................................ 9
In re Connect America Fund, Report & Order and Further Notice of
proposed Rulemaking, 26 FCC Rcd 17,663 (2011) ........................ 1, 4, 5, 6, 7, 8,
9, 10, 12, 14
In re Petitions of Sprint PCS and AT&T Corp. for Declaratory Ruling
Regarding CMRS Access Charges, Declaratory Ruling, 17 FCC Rcd
13,192 (2002), appeal dismissed, AT&T Corp. v. FCC, 349 F.3d 692
(D.C. Cir. 2003) .................................................................................................... 9
Petition of Time Warner Cable Information Services (New York), LLC for
Modification of Its Existing Eligible Telecommunications Carrier
Designation
, Order Approving Designation As A Lifeline-Only Eligible
Telecommunications Carrier, Case 12-C-00510 (N.Y. Pub. Serv.
Comm’n Mar. 14, 2013), available at http://documents.dps.ny.gov/
public/Common/ViewDoc.aspx?DocRefId={5667A04D-7CA6-43B6-
A352-0927793BFE20} ..................................................................................... 2-3
In re Sprint Nextel Corp., Order, 26 FCC Rcd 2216 (2011) ..................................... 2
In re Time Warner Cable Request for Declaratory Ruling that Competitive
Local Exchange Carriers May Obtain Interconnection Under Section 251
of the Communications Act of 1934, as Amended, to Provide Wholesale
Telecommunications Services to VoIP Providers
, Memorandum Opinion
and Order, 22 FCC Rcd 3513 (2006) .................................................................... 4

OTHER AUTHORITIES

47 C.F.R. § 51.913(b) ................................................................................................ 1
Bright House Networks Information Services F.C.C. Tariff No. 1 (2007),
available at https://apps.fcc.gov/etfs/public/view_a_129518
.action?id=129518 ................................................................................................. 3
Cablevision Lightpath, Inc., Tariff F.C.C. No. 4 (2007), available at
https://apps.fcc.gov/etfs/public/view_a_128329.action?id=128329 .................... 3
Comcast Phone, LLC Tariff FCC No. 1 (2003), available at
https://apps.fcc.gov/etfs/public/view_a_127852.action?id=127852. ................... 3


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GLOSSARY


AT&T Letter
Letter from Robert Quinn, Jr. (AT&T ) to Marlene Dortch



(FCC), CC Docket No. 01-92 et al., at 2-5 (Oct. 21, 2011)

IP


Internet Protocol

LEC

Local Exchange Carrier

Order

In re Connect America Fund, Report and Order and Further



Notice of Proposed Rulemaking, 26 FCC Rcd 17663 (2011)

VoIP

Voice over Internet Protocol


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SUMMARY OF THE ARGUMENT

Providers of fixed Voice over Internet Protocol (“VoIP”) service1 assess
charges on long-distance carriers to complete their calls. They do so either by
operating as Local Exchange Carriers (“LECs”) and filing tariffs, or by completing
calls in partnership with LECs that file tariffs. Before the FCC issued the Order,2
AT&T had begun to challenge the validity of the partnership model, arguing that
LECs cannot tariff charges for functions provided by their VoIP partners. The
FCC never accepted AT&T’s theory, and, prior to the Order, LEC partners of
VoIP providers generally continued to collect access charges for VoIP calls.
The Order resolved this dispute by phasing out access charges while, during
the transition, implementing what it termed the “VoIP Symmetry Rule,” which
treats VoIP providers operating under the partnership model identically to those
3
operating as LECs. AT&T made only a cursory argument below that this
transitional treatment would competitively harm wireless carriers, and the
Commission fully articulated why its historical refusal to allow wireless carriers to

1 “Fixed” VoIP providers (some of which are affiliated with cable companies) use
their own facilities to transmit calls to retail end-users. See Qwest Corp v. FCC,
689 F.3d 1214, 1221 n.4 (10th Cir. 2012). “Over-the-top” VoIP providers transmit
calls via public-Internet connections provided by third parties. Id. AT&T’s
challenge involves fixed VoIP providers; over-the-top services are not at issue
here. See AT&T Brief at 2 n.2.
2 In re Connect America Fund, Report and Order and Further Notice of Proposed
Rulemaking, 26 FCC Rcd 17663 (2011) (“Order”).
3 47 C.F.R. § 51.913(b).
1

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 10

tariff access charges (either directly or through a LEC) should not prevent parity as
between the two types of VoIP providers. The FCC’s decision should be upheld.

COUNTERSTATEMENT


A.

Business Structure of VoIP Providers.

Providers of fixed VoIP services use two business models. Some are
certified as LECs, providing both retail VoIP service and interconnecting with
other carriers (the “unitary” model). Others are structured as partnerships between
two entities: a non-LEC that provides retail VoIP service, and an affiliated or
unaffiliated LEC that interconnects with other carriers on behalf of the retail entity
(the “partnership” model). Although AT&T asserts that “[a]lmost all cable
companies that offer voice telephone services today choose not to offer those
services as regulated LECs,” AT&T Br. at 10, both models are common even
among cable companies. For example, both Cox Communications (the third-
largest cable company in America) and Charter Communications (the sixth-largest)
use the unitary model, as does Time Warner Cable (the second-largest) in some
4
markets.

4 See, e.g., In re Sprint Nextel Corp., Order, 26 FCC Rcd 2216, 2218 ¶ 4 (2011)
(Cox Communications as a LEC); In re Charter Communications, Order, 27 FCC
Rcd 7300, 7302 ¶ 4 (2012) (same as to Charter); Petition of Time Warner Cable
Information Services (New York), LLC for Modification of Its Existing Eligible
Telecommunications Carrier Designation
, Order Approving Designation As A
Lifeline-Only Eligible Telecommunications Carrier, Case 12-C-00510 (N.Y. Pub.
Serv. Comm’n Mar. 14, 2013), available at http://documents.dps.ny.gov/
2

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The two different business models largely stem from uncertainty as to
whether retail VoIP service is a “telecommunications service” that is appropriately
provided by a LEC or an “information service” that can be provided by a non-LEC
5
– an issue the FCC has not resolved. Yet the different models have little practical
significance to either subscribers or interconnecting carriers.

B.

Access Charge Tariffing by VoIP Providers and AT&T’s
Challenge.

In the years prior to the Order, LECs partnering with retail VoIP providers
had filed tariffs with the FCC and state commissions assessing charges for
6
connecting calls to their retail VoIP partners’ subscribers. LECs operating under
7
such tariffs routinely collected access charges. AT&T’s assertion that the Order

public/Common/ViewDoc.aspx?DocRefId={5667A04D-7CA6-43B6-A352-
0927793BFE20}.
5 See 47 U.S.C. § 153(24); id. §§ 153(53)-(54).
6 See, e.g., Cablevision Lightpath, Inc., Tariff F.C.C. No. 4 (2004), available at
https://apps.fcc.gov/etfs/public/view_a_128329.action?id=128329; Bright House
Networks Information Services F.C.C. Tariff No. 1 (2007), available at
https://apps.fcc.gov/etfs/public/view_a_129518.action?id=129518; Comcast
Phone, LLC Tariff FCC No. 1 (2003), available at https://apps.fcc.gov/etfs/public/
view_a_127852.action?id=127852.
7 See, e.g., JA__, Letter from Daniel Brenner to Marlene Dortch, Sept. 28, 2011
(Bright House, a partnership VoIP provider, would lose “tens of millions in lost
revenues” from being unable to continue collecting access charges during
transition); JA__, Letter from Samuel Feder to Marlene Dortch, April 6, 2012,
(noting that it is “not accurate” that clarifying rights of VoIP providers to collect
certain access charges would result in new charges, since Cablevision, a
partnership provider, had “historically assessed” such charges, and until very
3

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gave such LECs the right to tariff “for the first time,” AT&T Br. at 9, is thus a
misstatement.
Long prior to the Order, the FCC had expressly “endorsed” the VoIP
8
partnership model for purposes of interconnection. The FCC also had approved
the common practice of a LEC’s tariffing for functions performed by another
provider; carriers can use “joint billing arrangements,” and a carrier can bill “on
behalf of itself and another carrier for jointly provided access services.” In re
Access Charges Reform, Reform of Access Charges Imposed by Competitive Local
Exchange Carriers, Fifth Order on Reconsideration and Eighth Report and Order,
19 FCC Rcd 9108, 9115-16 ¶ 16 (2004).
Notwithstanding the above, AT&T’s theory has been that the VoIP
partnership model is analogous to two past circumstances in which the FCC had
not permitted certain charges to be tariffed. See JA__ (Letter from Robert Quinn,

recently, Verizon, one of the nation’s largest interexchange carriers, “had paid
them”); JA__, Letter from Samuel Feder to Marlene Dortch, March 12, 2012, at 2
(noting that Cablevision had already “suffered revenue losses” amounting to
“several million dollars annually” from reduction of access charges in Order);
JA__, Letter from Matthew Brill to Marlene Dortch, October 21, 2011, at 2 (ex
parte
by Time Warner, at the time a partnership provider, noting that VoIP
providers already had “existing tariff language describing access services” that
should “remain in force”).
8 JA__ (Order ¶ 970); see also, e.g., In re Time Warner Cable Request for
Declaratory Ruling that Competitive Local Exchange Carriers May Obtain
Interconnection Under Section 251 of the Communications Act of 1934, as
Amended, to Provide Wholesale Telecommunications Services to VoIP Providers
,
Memorandum Opinion and Order, 22 FCC Rcd 3513 (2006).
4

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Jr. (AT&T ) to Marlene Dortch (FCC), CC Docket No. 01-92 et al., at 2-5 (Oct. 21,
2011) (“AT&T Letter”)). AT&T’s first analogy is to the wireless context. JA__
AT&T Letter at 4 n.17. The FCC has long prohibited wireless carriers from
tariffing access charges; the FCC thus also prohibited a LEC partnering with a
wireless carrier from tariffing services performed by the wireless carrier that the
wireless carrier could not itself have tariffed. See Eighth Report and Order, Access
Charge Reform, 19 FCC Rcd at 9115-16 ¶ 16.
AT&T’s second analogy is to the scenario in which multiple wireline LECs
are involved in completing a call. AT&T Letter at 2-3 & n.8. There, the FCC ruled
that a LEC cannot tariff services it does not provide, to ensure that multiple LECs
cannot impose multiple charges for the same function. See Eighth Report and
Order, Access Charge Reform, 19 FCC Rcd at 9115-16 ¶ 16.
Prior to issuance of the Order, the FCC had not addressed AT&T’s claims
about whether these purportedly analogous situations should apply to the VoIP
partnership model. Thus, while AT&T argues that the law was “settled” on this
point, see AT&T Br. at 11, there was at most a “dispute” on the issue, largely
created by AT&T itself. JA__ (Order ¶ 968).

C.

The FCC’s Order

.
In addressing the larger intercarrier compensation issue surrounding VoIP,
the Order decided on a course of allowing for the collection of gradually-reduced
5

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access charges on VoIP traffic, balancing the objective of reforming access charges
with a competing objective of avoiding substantial disparities between VoIP and
traditional wireline traffic during the transitional period. See JA__ (Order ¶¶ 933-
953). The Order recognized, however, that its “symmetrical approach to VoIP-
PSTN intercarrier compensation” could be undercut if some VoIP providers were
excluded from the access charge regime because they used the partnership model
instead of the unitary model. JA__ (Order ¶ 970).
In deciding to avoid this result by treating both types of VoIP providers the
same during the transition, the Order considered, and rejected, AT&T’s claimed
analogies. See FCC Br. at 6-10. In the wireless context, the prohibition on
tariffing by a partner LEC for functions performed by a wireless carrier followed
directly from the prohibition on tariffing by wireless carriers themselves. JA__
(Order ¶ 970 n.2024). In contrast, there has never been any prohibition on tariffing
by VoIP providers; unitary VoIP providers can and do tariff. Thus, where a VoIP
provider uses a LEC partner, it does so not to circumvent a prohibition on tariffing,
but rather to obtain essential services. JA__ (Order ¶ 970).
Likewise, unlike the “multiple LECs” scenario, under the VoIP Symmetry
Rule, only one party – the LEC partner – can charge, and it can charge only once,
for services supplied via the partnership arrangement. JA__ (Order ¶ 970). This
eliminates the double-billing scenario that had troubled the FCC in the “multiple
6

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providers” context. Id. As the Order notes, the absence of concerns about
gamesmanship and double billing makes the VoIP partnership context “distinct”
from AT&T’s analogies. Id.

ARGUMENT

I.

THE FCC’S TRANSITIONAL RULE IS SUBJECT TO
HEIGHTENED DEFERENCE.

AT&T does not even acknowledge, much less challenge, the FCC’s decision
that unitary VoIP providers should be placed on a gradual “glide path” of steadily
reducing access charges, like traditional wireline providers. See JA__ (Order
969). AT&T challenges only the FCC’s subsidiary decision that VoIP providers
that use a partnership model should be treated no differently from unitary VoIP
providers. AT&T Br. 16.
AT&T’s challenge is subject to “arbitrary and capricious” review under 5
U.S.C. § 706, which is “highly deferential to the agency’s determination.” Aviva
Life & Annuity Co. v. FDIC, 654 F.3d 1129, 1131 (10th Cir. 2011); WildEarth
Guardians v. Nat’l Park Serv., 703 F.3d 1178, 1183 (10th Cir. 2013). The
“‘arbitrary and capricious’ standard is particularly deferential in matters
implicating … interim regulations,” Rural Cellular Ass’n v. FCC, 588 F.3d 1095,
1105 (D.C. Cir. 2009), because “[a]voidance of market disruption pending broader
reforms is, of course, a standard and accepted justification for a temporary rule.”
Competitive Telcomms. Ass’n v. FCC, 309 F.3d 8, 14 (D.C. Cir. 2002); see also
7

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Sorenson Commc’ns, Inc. v. FCC, 659 F.3d 1035, 1046 (10th Cir. 2011) (“[T]he
FCC is entitled to substantial deference when adopting interim rates”); ACS of
Anchorage, Inc. v. FCC, 290 F.3d 403, 410 (D.C. Cir. 2002); Competitive
Telecomms. Ass’n v. FCC, 117 F.3d 1068, 1073-75 (8th Cir. 1997); MCI
Telecomms. Corp. v. FCC, 750 F.2d 135, 141 (D.C. Cir. 1984).

II.

THE FCC ARTICULATED MULTIPLE, INDEPENDENTLY
REASONABLE GROUNDS FOR ITS INTERIM RULE.

The Order “examined the relevant data and articulated a rational connection
between that data and its decision,” WildEarth, 703 F.3d at 1182-83, in three
independent ways: (1) allowing the market gradually to adjust to the new bill-and-
keep regime; (2) ensuring parity among VoIP providers and between VoIP and
wireline LECs; and (3) preserving incentives to invest in IP during the transition.
None of these reasons applies to wireless carriers, and the Commission justifiably
declined AT&T’s assertion – which it made only in the most cursory fashion below
– that competitive considerations required parity with wireless carriers.

A.

Allowing the Market Gradually to Adjust.

The primary rationale behind the FCC’s Order is straightforward: a gradual
reduction of access charges for VoIP providers accounts for existing reliance on
such revenues and allows for a “measured transition.” JA__ (Order ¶ 952).
AT&T does not dispute the Order’s factual finding that, notwithstanding some
disputes, it had been “in the aggregate” the practice in the industry for LECs
8

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involved in the provision of VoIP service to receive tariffed access charge
revenues. JA__ (Order ¶¶ 952 & 948 n.1917); see also JA__ (In re Connect
America Fund, Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, 26 FCC Rcd 4554, 4748 ¶ 614 (2011)). The record before the
Commission showed that both VoIP providers operating under the partnership
model and those operating as unitary providers received such revenues prior to the
Order. See n.7 supra.
This alone explains the FCC’s refusal of AT&T’s demand that VoIP
partnerships be treated like wireless carriers during the transition. Wireless
carriers had been prohibited from tariffing access charges for years. See In re
Petitions of Sprint PCS and AT&T Corp. for Declaratory Ruling Regarding CMRS
Access Charges, Declaratory Ruling, 17 FCC Rcd 13,192, 13,199 ¶ 15 (2002),
appeal dismissed, AT&T Corp. v. FCC, 349 F.3d 692 (D.C. Cir. 2003); JA__
(Order ¶ 970 n.2024). Wireless carriers thus were differently situated from VoIP
providers: they had no expectation of access charge revenues to begin with.
This rationale did not require the FCC to decide AT&T’s claims about the
propriety of access charges by VoIP partnerships in the past, only to acknowledge
that VoIP partnerships were in fact receiving access charge revenues at the time of
the Order and that it made sense to allow them to adjust gradually to losing them.
AT&T may have preferred either a regime in which wireless carriers received a
9

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windfall or VoIP partnerships lost revenues immediately, but interim solutions
reasonably may “consider the past expectations of parties and the unfairness of
abruptly shifting policies.” MCI Telecommc’ns Corp., 750 F.2d at 141. That is
exactly what the FCC did here.

B.

Parity Among Wireline Providers.

The Order also is backed by a second rationale: parity among wireline
providers, including both among LEC and non-LEC VoIP providers and between
VoIP and traditional providers. The Order articulates a broader policy of
symmetry between VoIP and traditional providers. See JA__ (Order ¶¶ 968-969).
The “Commission has traditionally viewed facilities-based VoIP services as
‘sufficiently close substitutes for local service to include them in the relevant
product market,’” but not treated wireless carriers as competing in the same
market. Qwest Corp. v. FCC, 689 F.3d 1214, 1221 n.4 (10th Cir. 2012) (internal
citation omitted). As the Order explains, this policy would be undermined if some
VoIP providers were cut off from access charges based on an unrelated distinction
about how they had structured their businesses. Some VoIP providers have used
the unitary model and some the partnership model “[b]ecause the Commission has
not broadly addressed the classification of VoIP services…,” and because of the
Commission’s “endorsement of [VoIP partnership] arrangements.” JA__ (Order
970 & n.2024). It would be arbitrary to penalize providers that chose the
10

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partnership model endorsed by the Commission when their business structure does
not reflect any relevant difference in their services. Id.
AT&T argues that the parity sought by the Order is irrational because the
retail provider in a VoIP partnership is situated similarly to a wireless carrier, in
that neither tariffs access charges. AT&T Br. at 18-20. As detailed above,
however, the FCC articulated valid reasons for looking beyond this superficial
similarity. And as the Commission explained, wireless carriers’ inability to tariff
arises out of the Commission’s long-standing policy of allowing market conditions
to govern wireless compensation, whereas VoIP can be tariffed and a non-LEC
VoIP provider’s inability to file a tariff arises solely from its business structure.
See p. 6 supra. In the end, the Order had to choose an access charge transition that
aligned VoIP partnerships either with other wireline providers (both unitary VoIP
providers and traditional wireline providers) or with wireless providers. The FCC
made a rational election as to which kind of parity to maintain during the
transition.9

9 While the Commission established a slightly different compensation scheme for
VoIP-PSTN traffic than for non-VoIP traffic during the transition, both kinds of
traffic are subject to access charges; the only difference is the appropriate level of
those charges, which the FCC has explained. See FCC Resp. Br. in Resp. to
Windstream 23-27.
11

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 20

C.

Incentives to Invest in IP Technology.

The FCC also backed its decision with a third rationale that independently
justifies the Order: avoiding penalizing investments in Internet Protocol (“IP”).
“[O]ne of the goals of” the Order was to “promote investment in and
deployment of IP networks.” JA_ (Order ¶ 968). If the FCC had put in place a
transitional regime where VoIP providers operating under a partnership model
could not assess access charges (but others could), it would “disadvantage
providers that have already made [IP] investments,” id., merely because they chose
a particular business model – one that the Commission had endorsed. The FCC
reasonably articulated that such a state of affairs would not only be arbitrary, but
could be counterproductive to its IP deployment objectives. Id.
Again, wireless providers were not similarly situated to VoIP providers: they
could not have made investments in reliance on access charges, as they were not
receiving any.

D.

The Order

Does Not Disregard AT&T’s Claims of Competitive
Harm.

The rule the FCC adopted has nothing to do with wireless providers. It
neither changes the rights of wireless providers to collect access revenues nor
uniquely affects their obligation to pay access charges to others. AT&T’s repeated
suggestion that the Order “imposed…regulatory disadvantage” on “wireless
carriers,” AT&T Br. 9, 18, bears little resemblance to the rule the Order actually
12

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 21

implemented. In any event, AT&T’s claim of “competitive harm,” which it barely
articulated below, was fully addressed by the Order.
AT&T principally argued below that letting VoIP partnerships tariff access
charges was inconsistent with AT&T’s view of then-prevailing law and could have
unanticipated consequences on compensation for other kinds of services. JA__, __
(AT&T Letter at 2-4, 5-6). AT&T raised the argument on which it relies now – the
claimed “competitive harm” to wireless providers, see AT&T Br. at 18 – only at
the last minute (the last day party submissions were allowed) and in the most
cursory statements, claiming that it would “arbitrarily pick winners and losers in
the marketplace,” JA__ (AT&T Letter at 4-5), but never explaining how that
10
would be the case.
The economic reasoning argued without citation in AT&T’s brief – that the
rule somehow forces wireless carriers to charge higher “retail prices” AT&T Br. at
6 – is nowhere to be found in AT&T’s arguments to the Commission. In any case,
the Commission’s analysis fully disposes of AT&T’s claim. The FCC, as
explained supra, considered the possibility of doing what AT&T wanted: “to
immediately adopt a bill-and-keep methodology for VoIP traffic,” thereby

10 Given how generic and inchoate AT&T’s claims of “competitive harm” were
before the Commission, it is questionable whether AT&T preserved this particular
issue for review at all. See MCI Worldcom, Inc. v. FCC, 209 F.3d 760, 765 (D.C.
Cir. 2000).
13

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 22

equalizing the treatment of VoIP and wireless providers for intercarrier
compensation purposes right away. JA__ (Order ¶ 952). The Commission
acknowledged that this would “clearly facilitate the Commission’s transition” to a
regime in which all carriers are treated identically, but the Commission concluded
that an immediate switch would not “appropriately balance[] other competing
policy objectives.” Id. AT&T may disagree with the FCC’s judgment as a policy
matter, but that judgment was the FCC’s to make.

CONCLUSION

Intervenors respectfully request that the Court deny the petition.

Respectfully submitted,










/s/ David E Mills

/s/ Samuel L. Feder



David E. Mills
Samuel L. Feder
J.G. Harrington
Luke C. Platzer
DOW LOHNES PLLC
JENNER & BLOCK LLP
1200 New Hampshire Ave., NW
1099 New York Ave., NW
Suite 800
Suite 900
Washington, DC 20036-6802
Washington, DC 20001
Phone: (202) 776-2000
Phone: (202) 639-6092
Facsimile: (202) 776-2222
Facsimile: (202) 661-4999


Counsel for Cox Communications, Inc.
Counsel for Comcast Corporation







14

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 23









/s/ E. Ashton Johnston

/s/ Christopher J. Wright



E. Ashton Johnston
Christopher J. Wright
Helen E. Disenhaus
John T. Nakahata
LAMPERT, O’CONNOR & JOHNSTON, P.C. WILTSHIRE & GRANNIS LLP
1776 K Street NW
1200 Eighteenth Street, NW,
Suite 700
12th Floor
Washington, DC 20006
Washington, DC 20036
Phone: (202) 887-6230
Phone: (202) 730-1300
Facsimile: (202) 887-6231


Counsel for Level 3 Communications,
Counsel for HyperCube Telecom, LLC
LLC



/s/ Rick Chessen

/s/ Howard J. Symons




Rick Chessen
Howard J. Symons
Neal M. Goldberg
Robert G. Kidwell
Steven Morris
Ernest C. Cooper
Jennifer McKee
MINTZ LEVIN COHN FERRIS
THE NATIONAL CABLE &
GLOVSKY AND POPEO, P.C.
TELECOMMUNICATIONS ASSOCIATION
701 Pennsylvania Avenue, NW
25 Massachusetts Avenue, NW
Suite 900
Suite 100
Washington, DC 20004
Washington, DC 20001
Phone: (202) 434-7300
Phone: (202) 222-2445
Facsimile: (202) 434-7400
rchessen@ncta.com
hjsymons@mintz.com
ngoldberg@ncta.com
rgkidwell@mintz.com
smorris@ncta.com
ecooper@mintz.com
jmckee@ncta.com


Counsel for NCTA


April 24, 2013
15

Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 24

CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME
LIMITATIONS, TYPEFACE REQUIREMENTS, TYPE STYLE
REQUIREMENTS, PRIVACY REDACTION REQUIREMENTS, AND
VIRUS SCAN

1.
This brief contains 3,179 words of the 21,400 words the Court allocated for
the briefs of intervenors in support of the FCC in its October 1, 2012 Order
Consolidating Case No. 12-9575 with Other FCC 11-161 Cases, Establishing
Windstream Briefing Schedule, and Modifying Intervenor Participation. The
intervenors in support of the FCC have complied with the type-volume limitation
of that order because their briefs, combined, contain a total of fewer than 21,400
words, excluding the parts of those briefs exempted by Fed. R. App. P.
32(a)(7)(B)(iii).
2.
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and 10th Cir. R. 32(a) and the type style requirements of Fed. R. App. P.
32(a)(6) because this brief has been prepared in a proportionally spaced typeface
using Microsoft Word 2007 in 14-point Times New Roman font.
3.
All required privacy redactions have been made.
4.
This brief was scanned for viruses with Malwarebytes’ Anti-Malware
(version 1.51.2.1300, updated on April 24, 2013) and, according to the program, is
free of viruses.


/s/ Luke C. Platzer
April 24, 2013






Appellate Case: 11-9900 Document: 01019041817 Date Filed: 04/24/2013 Page: 25

CERTIFICATE OF SERVICE

Hereby certify that on April 24, 2013 I caused the foregoing Uncited
Intervenors’ Brief in Opposition to AT&T’s Brief to be filed by delivering a copy
to the Court via e-mail at FCC_briefs_only@ca10.uscourts.gov. I further certify
that the foregoing documents will be furnished by the Court through (ECF)
electronic service to all parties in this case through a certified CM/ECF user. This
document will be available for viewing and downloading on the CM/ECF system.
_/s/_Luke C. Platzer________
April 24, 2013


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